TRUMP’S “DISSING” OF MEXICO MIGHT BACKFIRE — BIG TIME! — If Mexico Plays The “China Card” The U.S. Might Regret Electing A Bully As President!

https://www.theatlantic.com/magazine/archive/2017/05/mexicos-revenge/521451/

Franklin Foer writes in The Atlantic:

“The Mexico–U.S. border is long, but the history of close cooperation across it is short. As recently as the 1980s, the countries barely contained their feelings of mutual contempt. Mexico didn’t care for the United States’ anticommunist policy in Central America, especially its support of Nicaraguan rebels. In 1983, President Miguel de la Madrid obliquely warned the Reagan administration against “shows of force which threaten to touch off a conflagration.” Relations further unraveled following the murder of the DEA agent Enrique “Kiki” Camarena in 1985. Former Mexican police officers aided drug traffickers who kidnapped and mercilessly tortured Camarena, drilling a hole in his skull and leaving his corpse in the Michoacán countryside. The Reagan administration reacted with fury at what it perceived as Mexican indifference to Camarena’s disappearance, all but shutting down the border for about a week. The episode seemed a return to the fraught days of the 1920s, when Calvin Coolidge’s administration derided “Soviet Mexico” and Hearst newspapers ginned up pretexts for a U.S. invasion.

. . . .

Once the threat of Soviet expansion into the Western Hemisphere vanished, the United States paid less-careful attention to Latin America. It passively ceded vast markets to the Chinese, who were hunting for natural resources to feed their sprouting factories and build their metropolises. The Chinese invested heavily in places like Peru, Brazil, and Venezuela, discreetly flexing soft power as they funded new roads, refineries, and railways. From 2000 to 2013, China’s bilateral trade with Latin America increased by 2,300 percent, according to one calculation. A raft of recently inked deals forms the architecture for China to double its annual trade with the region, to $500 billion, by the middle of the next decade. Mexico, however, has remained a grand exception to this grand strategy. China has had many reasons for its restrained approach in Mexico, including the fact that Mexico lacks most of the export commodities that have attracted China to other Latin American countries. But Mexico also happens to be the one spot in Latin America where the United States would respond with alarm to a heavy Chinese presence.

That sort of alarm is just the thing some Mexicans would now like to provoke. What Mexican analysts have called the “China card”—a threat to align with America’s greatest competitor—is an extreme retaliatory option. Former Mexican Foreign Minister Jorge Castañeda told me he considers it an implausible expression of “machismo.” Unfortunately, Trump has elevated machismo to foreign-policy doctrine, making it far more likely that other countries will embrace the same ethos in response. And while a tighter Chinese–Mexican relationship would fly in the face of recent economic history, Trump may have already set it in motion.

The painful early days of the Trump administration have reminded Mexico of a core economic weakness: The country depends far too heavily on the American market. “Mexico is realizing that it has been overexposed to the U.S., and it’s now trying to hedge its bets,” says Kevin Gallagher, an economist at Boston University who specializes in Latin America. “Any country where 80 percent of exports go to the U.S., it’s a danger.” Even with a friendly American president, Mexico would be looking to loosen its economic tether to its neighbor. The presence of Trump, with his brusque talk of tariffs and promises of economic nationalism, makes that an urgent task.Until recently, a Mexican–Chinese rapprochement would have been unthinkable. Mexico has long steered clear of China, greeting even limited Chinese interest in the country with wariness. It rightly considered China its primary competition for American consumers. Immediately after nafta went into effect in 1994, the Mexican economy enjoyed a boom in trade and investment. (A flourishing U.S. economy and an inevitable turn in Mexico’s business cycle helped account for these years of growth too.) Then, in 2001, the World Trade Organization admitted China, propelling the country further into the global economy. Many Mexican factories could no longer compete; jobs disappeared practically overnight.Mexico’s hesitance to do business with the Chinese was also a tribute to the country’s relationship with the “Yanquis.” A former Mexican government official told me that Barack Obama’s administration urged his country to steer clear of Chinese investment in energy and infrastructure projects. These conversations were a prologue to the government’s decision to scuttle a $3.7 billion contract with a Chinese-led consortium to build a bullet train linking Mexico City with Querétaro, a booming industrial center. The cancellation was a fairly selfless gesture, considering the sorry state of Mexican infrastructure, and it certainly displeased the Chinese.

But China has played the long game, and its patience has proved farsighted. The reason so many Chinese are ascending to the middle class is that wages have tripled over the past decade. The average hourly wage in Chinese manufacturing is now $3.60. Over that same period of time, hourly manufacturing wages in Mexico have fallen to $2.10. Even taking into account the extraordinary productivity of Chinese factories—not to mention the expense that comes with Mexico’s far greater fidelity to the rules of international trade—Mexico increasingly looks like a sensible place for Chinese firms to set up shop, particularly given its proximity to China’s biggest export market.Mexico began quietly welcoming a greater Chinese presence even before the American presidential election. In October, China’s state-run media promised that the two countries “would elevate military ties to [a] new high” and described the possibility of joint operations, training, and logistical support. A month and a half later, Mexico sold a Chinese oil company access to two massive patches of deepwater oil fields in the Gulf of Mexico. And in February, the billionaire Carlos Slim, a near-perfect barometer of the Mexican business elite’s mood, partnered with Anhui Jianghuai Automobile to produce SUVs in Hidalgo, a deal that will ultimately result in the production of 40,000 vehicles a year. These were not desultory developments. As Beijing’s ambassador to Mexico City put it in December, with the American election clearly on the brain: “We are sure that cooperation is going to be much strengthened.”. . . .

Not so long ago—for most of the postwar era, in fact—the United States and Mexico were an old couple who lived barely intersecting lives, hardly talking, despite inhabiting the same abode. Then the strangest thing happened: The couple started chatting. They found they actually liked each other; they became codependent. Now, with Trump’s angry talk and the Mexican resentment it stirs, the best hope for the persistence of this improved relationship is inertia—the interlocking supply chain that crosses the border and won’t easily pull apart, the agricultural exports that flow in both directions, all the bureaucratic cooperation. Unwinding this relationship would be ugly and painful, a strategic blunder of the highest order, a gift to America’s enemies, a gaping vulnerability for the homeland that Donald Trump professes to protect, a very messy divorce.”

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Remember, folks, you read about the potential “Chinexico” disaster first on Courtside! http://wp.me/p8eeJm-AF

Pretty scary when we elect a President who might understand even less about the global politico-economic situation than a retired U.S. Immigration Judge!

PWS

04-234-17

 

 

 

Forbes: “Don’t Mess Around With Slim” — Has Trump Bitten Off More Than He Can Chew In Provoking Economic/Trade Confrontation With Mexico?

http://www.forbes.com

Dolia Estevez writes in Forbes:

“At the press conference, Slim was flanked by two of his sons and a son-in-law and holding Trump’s books “Great Again” and “The Art of The Deal.” Slim called the American President a “great negotiator” who knows how to take advantage of weak adversaries.

Slim praised the Mexican President for calling Trump’s bluff and said that the outpouring of support for Peña Nieto showed Trump that Mexico is united to face the challenge.

This week’s unusual public showdown with Mexico–a friendly nation closely linked to the U.S. by geography, trade, culture and history—plunged U.S.-Mexico relations to a new low.

But in an apparent effort to cool tensions, Trump and Peña Nieto spoke for an hour by phone on Friday. The Mexican president’s office said in a statement that the two presidents, “agreed for now to not speak publicly about” the wall. Slim said the call between the leaders was a result of Mexico standing up to Trump. He suggested they should talk more and tweet less.

“Lack of unity brought Mexico five wars and four losses of territory. We learned that lesson. We have always been stronger united. We have to negotiate with Trump from a position of strength, without anger or submission. It will be a difficult and hard negotiation,” Mexico’s richest man said.

Slim said the “best wall” to prevent Mexicans from going North would be investment that creates job opportunities in Mexico.

Slim’s call for unity comes a week after a Mexican poll gave Slim the highest percentage approval among Mexican public figures as the best qualified person to face Trump. With his popularity approaching single digits, most Mexicans see Peña Nieto as politically too weak to stand up to Trump.”

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While Slim no longer holds the title of “World’s Richest Person” (that’s Bill Gates at $84.2 billion) his #6 ranking and $50 billion net worth is not too shabby and still makes hm the richest person in Latin America. Slim makes President Trump, who weighed in at a distant #502 with a mere $3.7 billion net worth, look like a “loser” by comparison.  Trump’s economic sword rattling has also helped Slim become the most popular man in Mexico and the one most Mexicans would choose to “do battle” with Trump at the negotiating table.

PWS

01/28/17